CF: Milan now virtually debt-free – talks of a potential sale arise again

By Oliver Fisher -

AC Milan’s financial recovery is continuing and that may be the precursor to a sale by owners Elliott Management, according to a report.

Calcio e Finanza report how Milan should end the financial year of 2021-22 with a loss of €50-60m, which shows that the recovery process that began two seasons ago when the losses were over three times as much is beginning to bear fruit.

Just yesterday the Milan management were able to speak relatively calmly in a hearing with UEFA on the topic of Financial Fair Play and while it is true that Milan are still making losses, it is equally true that the restrictive measures of the pandemic deprived them of revenue.

Milan have something which other top clubs in Italy do not have: a favourable debt situation. Elliott have practically eliminated financial debts (and only current ones remain) so that means that if an offer were to come to buy the company, Elliott would pocket the full amount of the transaction.

For a fund that by its nature invests in companies, heals them and then resells them at a higher price, this could be quite tempting. Elliott have so far invested over €700m in the Rossoneri and given the size and history of the club – and its prospects for the future – they could easily be valued even €1bn.

It must be noted that when investment funds measure the profitability of an operation, they do not look so much at the mere difference between the sale amount and the total of what was previously invested in that company, but they use an index called IRR (Internal Rate of Return).

This calculation takes into account the time duration in which the capital has remained committed in such a deal and how much this has yielded comparing it to operations in which that same money could have been invested alternatively.

Rumours of a sale have returned and Calcio e Finanza believe that there is something in a sale to North American subjects for a value of over a billion, but they were told that the Elliott fund have no intention of selling unless an irrefutable offer comes in.

 

Tags AC Milan

10 Comments

  1. Hope they can find real buyer that love AC Milan not the fake investor/buyer like Yong Hong Li that buy club with debt and don’t know how to managing club

  2. With Abramovich selling Chelsea and how the english treat him like trash perhaps he can invest in our Milan instead.

  3. Well, it wouldn’t be a surprise, I’ve always suspected it. They are not enthusiastic about sports enough to keep the investment in Ac Milan. They took over Milan because the Li Management faulted. The plan is probably to steady the ship, as soon as the accounts are balanced they look for a good buyer, all while they keep the team fairly competitive… It has always been clear why our Mercarto has been dismal at best. We can’t even cough out 15m for a decent player, favouring free transfers and 5m buys. What a shame.. Milan truly deserves better.

    1. Not true. Tomori, Leao, Tonali, Maignan, Hernandez… Plenty of players that are bought in recent years for a lot more than 5 mil. Keep in mind that Milan are still restricted by UEFA at the moment. Elliott has done well so far keeping the balance between competitiveness and financial health. I couldn’t see anybody do it better in this situation.

      1. Completely agree with you Ed3lm4n!!

        Keo did you like when we where bleeding money every year? did you like the fall from grace – no UCL for years? A club like Milan deserves to be run perfectly – Elliott has done a fantastic job together with Gazidis, Maldini and Massara.

        Forza Milan!

    2. I disagree keo, how can we cough up 30M when we spent millions out of debt in li’s hand without solid revenue? No CL, no scudetto, nothing. How will we recuperate if we pile more debt, the club will fall even harder, elliot did right to capped the wage and try to buy smart. The hardest part is to find people with enough knowledge on football and business acumen, we’re lucky we have maldini on this part, and ofc moncada’s eye..
      Now we’re stable, its easier for us whether we move from eliot or not, and whatever achievement we have now will only come in as revenue, we’re coming back for real, and Eliot plays a big part on that.
      Or you prefer our full of debt club with a risk being suspended from every football competition you know and start selling star players (if we have any) just to see another day?

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